FLUOR Corporation has announced net earnings for the fiscal third quarter ended July 31 of US$33.3 million, compared to $50.2 million for third quarter 1999.
Revenues were $2.9 billion compared with $3.1 billion in the third quarter a year ago.
The third quarter results showed a pretax credit of $12 million from the recovery of excise taxes paid on coal export sales tonnage by Fluor's AT Massey Coal enterprise.
The taxes were determined to be unconstitutional by a 1998 federal district court decision and the IRS recently issued procedures for obtaining refunds related to such excise taxes. Interest on the tax refund of $5.3 million was included in interest income.
"A critically important element in our efforts to improve performance has been substantial improvements in Fluor Daniel's operating procedures," said Philip Carroll, chairman and CEO of Fluor Corporation.
"In light of these actions we are extremely disappointed that a provision must be taken this quarter within our Duke/Fluor Daniel joint venture for the cost overrun."
According to Carroll, the company is taking immediate action, along with Duke Energy, to determine where execution processes in the firms' partnership need improvement and what steps should be taken to minimise or eliminate the prospect for such incidents in the future.
However, Carroll added, "With the project charge and significantly greater weakness in results for Massey Coal, we estimate our fiscal 2000 operating earnings will be approximately 15% below 1999 levels.
“Our primary focus for the remainder of this year will be to further increase our efforts to complete the actions necessary to ensure Fluor enters the year 2001 fully prepared to capitalise on the substantial opportunities we see ahead. This includes the commitment to proceed with our announced plans for a spin-off of Massey, which will be done for strategic reasons that remain valid and unchanged."
AT Massey, Fluor's low-sulphur coal business, reported quarterly operating profit of $27.6 million, excluding the nonrecurring excise tax refund, down from $33.7 million for the same period a year ago.
Coal property transactions contributed $10.6 million to Massey's third quarter operating results. Revenues for third quarter were $275.1 million ($266.3 million in 1999), while operating profit amounted to $39.6 million ($33.7 million in 1999).
